Small change for Farepak victims

Christmas savers who lost an average of £400 each when Farepak went bust last October will receive at most 5p for every pound, the administrator has revealed.

BDO Stoy Hayward today released its creditors' report, which is available to read on the website farepak.co.uk.

It is estimated agents and customers were owed a total of £46m when Farepak called in the administrators.

But the report says that once all Farepak's assets have been sold, agents and employees will still only receive a maximum of 5p for every pound they saved with the failed firm.

The report also says £16,000 will be payed to employees who are treated as preferential creditors.

The report also blames Farepak's collapse on its failure to 'adequately' ringfence cash paid in by customers. 'It is clear that Farepak did not protect the money paid in by agents and customers,' the report said.

The administrators put down Farepak's failure to the £33m it lent to parent company European Home Retail (EHR), which was not paid back.

BDO Stoy Hayward took £395,202 in fees from the funds made available by administration, but waived an estimated £100,000 in costs arising from help given to MPs, campaigners and the Farepak Rescue Fund.

This is Money says: If you want to read the report at farepak.co.uk, click on the 'Customers report' link: it is a condensed version of the lengthier, more complex 'Creditors' report'.

However, below that there is a helpful point-by-point guide to the meaning of the report and what action you might want to take.

If you have made a claim already and wish to accept the administrator's proposals in the report, then you need take no further action.

If you feel strongly either way about the resolutions contained in the report, you might want to vote on them: how to do this is explained in the point-by-point guide.